New tax on billionaires highlights tax reform plan
WASHINGTON, – June 26, 2015 – (RealEstateRama) — Sen. Bernie Sanders (I-Vt.) today introduced legislation to increase estate tax rates on the top three-tenths of one percent of Americans who inherit more than $3.5 million, while eliminating loopholes that have allowed the wealthiest Americans to avoid billions in taxes. Sanders said the legislation was needed to reduce the massive gap between the very rich and working class Americans.
The announcement was the latest tax reform proposal from Sanders, who has made the issue of reducing skyrocketing income and wealth inequality one of his central goals since becoming ranking member of the Senate Budget Committee.
“Our nation cannot survive morally or economically when so few have so much while so many have so little. We need a tax system which asks the billionaire class to pay its fair share of taxes and which reduces the obscene degree of wealth inequality in America,” Sanders said.
His plan has already won praise from tax advocates and some of the leading progressive voices in the country and around the world, including Robert Reich who was labor secretary for President Clinton, and Thomas Piketty, author of Capital in the Twenty-First Century.
“The fairest way to reduce wealth inequality, rebuild the disappearing middle class, and preserve our democracy is to enact a progressive estate tax on multi-millionaires and billionaires,” Sanders said.
“The easiest way to make a fortune in the United States is to inherit it. This country is the richest on earth at the richest time in its history. But with the wealthiest .1 percent of Americans holding as much wealth as the bottom 90 percent, it is also one of the most economically unequal periods. Yet, the House Republicans voted to make Paris Hilton, her bratty brother and other rich ‘kids’ even richer by completely repealing the Estate Tax,” said Rep. Jan Schakowsky, who joined Sanders in introducing the bill.
Only the very wealthiest millionaires and billionaires would be effected by the Sanders plan; 99.75 percent of Americans would not pay a penny more in estate taxes.
Sanders’ bill does the following:
• Lowers the estate tax exemption level from $5.4 million to $3.5 million for individuals and from about $11 million to $7 million for couples.
• Increases the marginal tax rate to 45 percent on estates between $3.5 million to $10 million, 50 percent on estates between $10 million and $50 million, and 55 percent on estates over $50 million.
• Creates a new billionaire surtax of 10 percent that would only impact 530 billionaires who are worth a combined $2.6 trillion.
• Ends loopholes allowing billionaire families to set up dynasty trusts to avoid taxes.
• Closes loopholes used by the wealthy to avoid estate taxes.
• Protects family farms and conservation easements.
Positive reaction to Sanders bill was widespread:
America “is creating an aristocracy of wealth populated by heirs who don’t have to work for a living yet have great influence over how the nation’s productive assets are deployed,” said Reich.
Piketty, the top-selling author and Paris School of Economics professor, said: “We need stronger investment in skills and education, better paying jobs and a more progressive tax system. Sen. Sanders’ estate tax bill is an important step in this direction.”
Sister Simone Campbell, executive director of NETWORK, said: “We support the Responsible Estate Tax Act as a step toward mending the wealth gap in our nation. We know that this gap is tearing us apart. Only by changing some policies that preference the mega-rich over the needs of the vast majority and investing in our future will we continue to be a country that supports the common good.”
Deborah Weinstein, executive director of the Coalition on Human Needs, said: “The current estate tax law lets many multi-million dollar inheritances go untaxed, widening the divide between the very rich and everyone else. The Coalition on Human Needs strongly supports Senator Sanders’ The Responsible Estate Tax Act. It will make our tax code fairer and allow us to invest in economic growth for all.”
Nancy Duffy Campbell, Co-President of the National Women’s Law Center, said: “Years of tax policies that have disproportionately benefited wealthy individuals and big corporations have left the United States with a tax system that is both unfair and insufficient to meet national priorities.”
Bob McIntyre, director of Citizens for Tax Justice, said: “Restoring a more robust estate tax would be an important step towards reducing inequality in America.”